Tuesday, December 20, 2016

On December 19,
2016, John W. Davis II, the founder and CEO of Notice and Comment Inc., published
an
article in The Hill proposing an
interesting idea for the FCC to join the federal eRulemaking Program. Regulations.gov serves as the government’s
public-facing portal where federal agencies issue regulatory notices and accept
citizen responses, but unlike most federal agencies, the FCC uses its own
system for publishing rulemakings and accepting comments.

Mr. Davis says
that the wave of 4 million comments made during the Net Neutrality proceeding
showed a clear “need for modernization of the Commission’s processes.” Not only
did the FCC’s comment system crash in 2014, but “it ended up taking nine months
and an estimated $50 million for the FCC to consider the entire comment
dataset.” On the other hand, Mr. Davis endorses the federal
eRulemaking Program:

With standardization of data comes a whole new level
of immediate transparency in governance, permitting a higher degree of public
participation -- and at earlier stages of the process, such as the discovery
phase of highly common utility-pole- attachment disputes, which fall under FCC
purview. This greater degree of public data accessibility should naturally
result in more efficient complaints adjudication.

Given the possibility
that the FCC’s Open Internet Order
could get repealed by the incoming Commission, Mr. Davis says that the FCC
should join the eRulemaking Program as soon as possible. He states:

[I]f net neutrality rules are re-opened for
consideration, judging from public response to the last round, the FCC stands
to be inundated by many millions of comments. Even if the Commission’s network
does not crash again, its staff of lawyers are sure to be occupied for several
months manually reviewing and analyzing the tidal wave of data. Meanwhile,
businesses will remain in a state of uncertainty about the shape of the future
telecom regulatory environment.

The benefits in terms of cost savings, government
responsiveness, and public data transparency make the move an obvious choice.

If the FCC were to
join the eRulemaking Program, there still would remain many areas of necessary
process reform (see here,
here,
and here).
However, the proposal is certainly an interesting one that should garner consideration.

Thursday, December 15, 2016

On November 25, I posted a blog, "Mark Zuckerberg and Fake News," in which I addressed Facebook CEO Mark Zuckerberg's post on "fake news." I included this excerpt from his November 25 post:“The problems here are complex, both technically and philosophically. We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible. We need to be careful not to discourage sharing of opinions or to mistakenly restrict accurate content. We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties.”And I said: "Mr. Zuckerberg commendably outlines some measures Facebook itself is considering to address the fake news issue."Now, in a December 15 post, "News Feed FYI: Addressing Hoaxes and Fake News," Adam Mosseri, VP, News Feed, offers some steps that Facebook is taking now to address "fake news." These steps include: easier reporting; flagging stories as disputed; informed sharing; and disrupting financial incentives for spammers.Mr. Mosseri acknowledges that these are first steps, and that Facebook intends to learn from them and adjust accordingly if advisable.As Mr. Zuckerberg said in November, "[t]he problems here are complex, both technically and philosophically." This certainly is true, it's why it makes sense, as Mr. Mosseri says, to approach the fake news problem carefully.The steps that Facebook has announced seem reasonable, certainly on a trial basis so that their effect on users' experience can be gauged. It's important that Facebook and other similar platforms take the initiative themselves to consider means of addressing the problem of fake news in ways that are compatible with the vast majority of users they seek to attract and serve. If they don't, there may be calls, however misplaced, by some for the government to "just do something."That would be terribly wrong. On this point, I'll just repeat what I said in my earlier post:"As a matter of sound policy, the government should stay out of the business of evaluating the truthfulness of news, except, for example, in rare instances involving public health and safety. And as a matter of law, the First Amendment’s free speech clause demands no less."

IPEC Daniel Marti should be commended for the new report. Not only does it recognize
the impact that strong protections of IP rights has had on U.S. GDP ($6.6
trillion value added), but it addresses key ways that IP rights can be strengthened
including: curbing illicit efforts with innovative enforcement techniques; increasing
the ability of consumers to recognize illegal content and goods; and using trade
agreements to promote strong global IP rights.

Utilizing various means to enforce rights
enables artists and creators to earn a return on their labor and incentivizes innovation and economic activity around the world.

Monday, December 12, 2016

On December 6, 2016, the
International Intellectual Property Alliance (IIPA) published its 2016 report
entitled “Copyright Industries in
the U.S. Economy.”
The new report, authored by Stephen E. Siwek, finds that the “core copyright
industries,” – that is, industries whose primary purpose is to create, produce,
distribute or exhibit copyright materials – generated $1.2 trillion in economic
activity in 2015, accounting for 6.88% of the U.S. economy. In the same year, the
core copyright industries employed 5.5 million workers, which is 3.87% of the
entire U.S. workforce.

At a time when much
attention is focused on reviving America’s economic growth and job creation
prospects, these figures should not be lightly dismissed.

The core copyright
industries do not just comprise a substantial portion of the American economy;
they continue to grow at an above average pace. Between 2012 and 2015, the core
copyright industries grew at an aggregate annual rate of 4.81%. This is 127%
greater than the growth rate (2.11%) for the entire U.S. economy over the same
period. Furthermore, the average annual compensation paid to core copyright
workers is $93,221, which is 38% higher than the average annual compensation
paid to all U.S. workers, $67,715.

Additionally, the core copyright
industries are a key contributor to U.S. exports. The new report finds that
sales of selected U.S. copyright products in overseas markets amounted to $177
billion in 2015, a significant increase from $164 billion in 2014. This is
impressive considering that other major industries, such as chemicals,
pharmaceuticals and medicines, agriculture, and electronics saw little or no
growth in their respective exports over the same period. (See the chart below.)

Foreign Sales & Exports for Selected U.S.
Industries (Billions of U.S. Dollars)

In a December 2016 blog, Michael Horney
discussed why it is important for President-elect Donald Trump to reconsider
his apparently negative perception towards the Trans-Pacific Partnership (TPP)
and similar trade agreements. By implementing strong Intellectual Property protections
for 12 member countries, TPP would incentivize creation and innovation among
American (and foreign) entrepreneurs. If TPP is adopted, the U.S. would see a
significant increase in the amount the U.S. exports, including core copyright
and IP-intensive industries.

The IIPA’s report shows
that the core copyright industries play a large role in the U.S. economy and that
these market segments are growing at a faster rate than most U.S. markets. The
United States’ robust protection of intellectual property rights has
incentivized creation and entrepreneurial activity that has not only benefitted
American consumers and workers, but also has spurred economic activity overseas.

Friday, December 09, 2016

On December 8,
2016, the House Judiciary Committee Chairman Bob Goodlatte and Ranking Member John
Conyers proposed to modernize the U.S. Copyright Office for the 21st
Century. The proposal
would allow the Copyright Office to have autonomy over its budget and technology
needs. The proposal also would allocate to the Copyright Office the necessary funds for information
technology modernization, enabling the Copyright Office to maintain a “searchable,
digital database of historical and current copyright ownership information.”

The Copyright
Office is long overdue for technology modernization and FSF scholars have made
multiple statements regarding this need. (See here,
here,
and here.)
Modernization is necessary for our copyright system to achieve its important
purposes of protecting artists’ and creators’ rights to earn a return on their
labor and to facilitate market transactions in copyrights in a way that
promotes “the Progress of Science and useful Arts.”

We commend
Chairman Goodlatte and Ranking Member Conyers for their proposal and hope it
quickly passes through the House of Representatives.

Monday, December 05, 2016

The Tran-Pacific Partnership (TPP), a trade
agreement between the United States and 11 other Pacific Rim countries, seemingly
is dead, at least for now. It will
not be approved by the current Congress. Therefore, it is up to President-elect
Donald Trump to revive it during his Administration.

It’s true that President-elect
Trump has
said that TPP is a “disaster” and he has declared that he will withdraw
from the agreement on his first
day in office. But other than a few bullet points on his
website, the President-elect has never publicly
explained why he does not like this particular trade deal, which looks to be a win
for entrepreneurs, creators, consumers, and the global economy.

As I discussed in
a June
2016 blog, TPP would expand global trade by eliminating roughly 18,000
tariffs that member countries have imposed on imports from the United States,
lifting millions of people out of poverty around the world. By removing these
trade barriers imposed by foreign countries and others imposed by the United
States, TPP would allow consumers and entrepreneurs in all member countries to
enjoy more economic activity and lower prices than what the status quo offers.

From an
intellectual property (IP) perspective, TPP appears to require adherence to strong
protections of IP rights in member countries. This would help artists and
entrepreneurs around the globe to earn a return on their creative works and the
labor that makes them possible. According to a September
2016 report by the Department of Commerce and the Patent and Trademark
Office, in 2014, 45 million jobs (or 30% of the jobs in the U.S. economy)
either directly or indirectly were generated by IP-intensive industries. In the
same year, IP-intensive industries added $6.6 trillion of economic activity,
which is roughly 38% of GDP.

TPP addresses all
aspects of IP, including copyright, patents, trade secrets, and trademarks. The
IP
chapter of TPP aims to do the following:

Improves strong and balanced protection of rights and
enforcement of laws;

Bolsters incentives for the development of, and trade
related to, IP-intensive products;

Addresses common threats, including piracy,
counterfeiting, and other related infringements, as well as misappropriation
(including cyber theft) of trade secrets;

Promotes transparent, efficient, and fair regulatory
systems, including for patent and trademark application and registration;

Promotes development of and access to innovative and
generic medicines;

Facilitates legitimate digital trade, including in
creative content; and

Prevents the spread of overly-restrictive geographical
indication policies, including by safeguarding the rights of prior trademark
owners and rules clarifying the use of generic terms.

Establishing strong IP safeguards among countries in
the Pacific Rim would diminish theft of American IP, which totals $320
billion annually. U.S leadership regarding strong IP rights protections
will incentivize more investment, innovation, and economic growth at home and
abroad.

A 2014
report from NDP Analytics estimates that TPP would increase U.S. exports by
$26 billion, U.S. GDP by $11 billion, and American jobs by 48,000 with roughly
two-thirds of these benefits coming from IP-intensive industries. This increase
in U.S. exports would have direct spillover effects for the other 11 member
countries, leading to an estimated $6.4 billion increase in GDP and 68,240
additional jobs. Of course, these figures do not include the increases in
economic activity and job creation that will occur among member countries nor do
they include the increases in U.S. imports.

Additional
economic activity and development within member countries would not be the only
benefit flowing from a stronger IP framework; mutual gains from trade are much
higher with transactions that contain strong protections of IP rights rather
than weak protections. Therefore, member countries which currently have
weak IP protections according to the Chamber of Commerce’s Global IP Center International Index,
such as Peru, Chile, and Mexico, will incentivize creation and innovation
within their own countries. And also, other developing economies, which trade
with TPP countries, will recognize the gains from trade and be encouraged to
adopt similar IP rights protections.

Gains from trade
are mutually beneficial but not necessarily equal. If TPP is adopted, the
United States would benefit from the positive externality of robust IP rights
protections in other countries and from lower trade barriers with countries in
the Pacific Rim. When more countries around the world have strong IP rights
protections, American creators and entrepreneurs have a greater incentive to
innovate because their creations are less likely to be stolen overseas.
However, developing countries, which, on the whole, would substantially upgrade
their IP rights protections with the adoption of TPP, likely will enjoy an even
higher marginal benefit than the U.S. because their economies have not
experienced as much innovation as countries with strong IP rights protections
in place. In general, and all else equal, developing countries grow faster than
developed countries when there is an expansion in global trade.

Perhaps, the
President-elect views the trade agreement as problematic because he considers global
trade as an “us versus them” phenomenon. In other words, he may consider global
trade as a zero-sum game, when, in actuality, it is a variable-sum game. For
example, even if Vietnam benefits more from TPP than the United States, this does
not mean the U.S. loses. Both countries are better off, even if the marginal
benefit might be greater for one country over another.

President-elect
Trump should revive TPP during his administration. It is vital that this trade
agreement be adopted to encourage the creation of jobs and to foster greater
innovation and investment in the United States and in the Pacific Rim. Mr.
Trump’s campaign primarily focused on creating jobs in the United States. TPP
is a win for American workers and consumers because it would expand economic
activity around the world, increasing American imports and exports.

In 2014, U.S.
imports and exports from IP-intensive industries were valued at $1.4 trillion
and $842 billion, respectively. Those values likely would increase if IP rights
are enhanced around the world. (NDP Analytics projects that TPP will increase annual
U.S. exports by up to $26 billion.)

With the adoption
of TPP, President-elect Trump could help spur the economy, which is clearly a
top priority. Let’s hope that Mr. Trump changes his mind about TPP.

On December 1,
2016, the FCC published its sixth Measuring
Broadband America report, which examines the speeds, latency, and
consumer trends of fixed broadband services nationwide. Here are some of the
key findings from the report:

Significant growth in broadband speeds available to
consumers, though the results are not uniform across technologies. The median
download speed, averaged across all participating ISPs, has almost quadrupled,
from approximately 10 Mbps in March 2011, to approximately 39 Mbps in September
2015. Compared to last year’s value of 32 Mbps, this year’s median download
speed was an increase of approximately 22%.

Since the first Measuring Broadband America report in
August 2011, the average annual increase in median download speeds by
technology is 47% for cable, and 14% for fiber, while popular DSL speeds have
remained largely the same. (See the chart below for the growth in the median
download speed over the past five years.)

Actual speeds experienced by most consumers meet or
exceed advertised speeds. All ISPs using cable, fiber or satellite technologies
advertise speeds for services that, on average, are close to the actual speeds
experienced by their subscribers. Fixed cable and fiber broadband customers
experienced speeds that were 100% or better than advertised.

The chart below shows
the ratio of weighted median speed to advertised speed for a number of
broadband providers. Of the 16 providers included in the sample, nine of them
delivered actual download and upload speeds that are greater than the advertised
speeds.

Consumers with access to faster services continue to
migrate to higher service tiers. Data shows that panelists subscribed in
September 2014 to service tiers with advertised download speeds between 15 Mbps
to 50 Mbps are the most likely to have migrated towards higher service tiers.
In contrast, among panelists subscribed in September 2014 to service tiers with
advertised download speeds of less than 15 Mbps – offered mostly by DSL
services – only a few percent migrated within the following year to a service
tier with a higher download speed.

Latency and packet loss vary by technologies. Consumers
generally experienced low latency – the time it takes for a data packet to
travel from one point to another in a network – on DSL, cable and fiber
systems. Higher latency in satellite services may affect the perceived quality
of highly interactive applications such as VoIP calls, video chat and
multiplayer games. Consumers generally experienced low packet loss – the
percentage of packets that are sent by the source but not received by the
destination – on cable, satellite and fiber systems.

The results of the
FCC’s sixth Measuring Broadband America
report show that the quality of broadband is increasing throughout the United
States. Despite regulatory
barriers that may have slowed investment and innovation in broadband
technologies, the broadband market remains dynamically competitive and
consumers are benefiting from faster speeds and more reliable connections.

Thursday, December 01, 2016

Here's an interesting take in Telecompetitor on CenturyLink's acquisition of Level 3 and how the merger will transform CenturyLink's business. CenturyLink would become the most heavily business-focused service provider of the five largest national telecom carriers.